A broker boasting over three decades of experience has been suspended due to improper use of margin trading in customer accounts. Dana Davis, who spent almost half his 33-year career at a Newbridge Securities Corp. New York branch, agreed to a 12-month suspension and a restitution payment of $75,000, according to a consent document filed by the Financial Industry Regulatory Authority (FINRA) last week.
Finra accused Davis of inappropriately utilizing margin trading for three inexperienced, modestly invested clients, resulting in over $268,000 in combined trading costs and losses. Of the 737 trades executed for these customers, all but 13 involved margin trading.
One client, a South Carolina-based pastor, opened a Newbridge account in May 2017 for his retirement. Over the following 37 months, Davis executed 457 trades in the account, with all but 10 being margin trades. The customer’s account suffered trading losses of $93,676.24 against average month-end equity of $132,097.12.
Another client, a pastor from New York, opened a Newbridge account in January 2018, seeking a conservative investment approach. Over the next 29 months, he paid a total of $5,909.92 in costs, commissions, and interest for 28 margin trades executed by Davis, despite having an average month-end equity of $8,943.47. Only three non-margin trades were executed during this time.
The third client, a New York police officer, opened a Newbridge account in July 2015. Over the next five years, Davis executed 249 margin trades in her account, which incurred trading losses of $14,340.58 compared to an average month-end equity of $19,802.50.
Finra charged Davis with violating its rules 2111 and 2010 concerning the suitability of recommended investments and adherence to high standards of commercial honor and just and equitable trade principles, respectively. While not admitting or denying the allegations, Davis agreed to the suspension and partial restitution of $75,000. FINRA waived a fine due to Davis’s limited ability to pay.
Efforts to contact Davis for comment were unsuccessful. Newbridge, not a party to the action, did not respond to requests for comment. Davis first entered the securities industry in 1989 and registered with seven firms before joining Newbridge in 2006. In October 2022, he left Newbridge for Alexander Capital, but his registration there ended last month.
Davis’s record includes nine customer complaints, eight resulting in settlements. All complaints alleged excessive, unsuitable, and/or unauthorized trading. Davis denied liability in five settlements, claimed voluntary dismissal in one, contributed $25,000 towards an attorney’s fee in another, and settled the last to avoid litigation costs.
Who is Dana Davis?
Dana Davis is a financial advisor currently employed by Newbridge Securities Corporation, based in Boca Raton, Florida. Newbridge Securities Corporation is a full-service broker/dealer and investment banker that offers a broad spectrum of financial services and products to individuals and corporate clients.
Customer Complaints and Lawsuits
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), Dana Davis has been subject to seven customer complaints and one termination for cause. Many of these complaints concern allegations of high-frequency trading activity.
Dispute 1
- Date: 8/18/2021
- Status: Settled
- Allegations: Overconcentration, misrepresentation, omissions, unsuitable recommendations
- Damage Amount Requested: $50,000.00
- Settlement Amount: $14,999.00
- Broker Comment: Mr. Davis vehemently denies the allegations in the Statement of Claim and expressly denies any wrongdoing concerning servicing the client’s accounts.
Dispute 2
- Date: 9/5/2018
- Status: Settled
- Allegations: Sale of unsuitable securities, use of margin, negligence, and breach of fiduciary duty
- Damage Amount Requested: $150,000.00
- Settlement Amount: $46,750.00
- Broker Comment: The customer had 3 accounts with Newbridge Securities. In one of the accounts, the customer had an energy company that lost most of its value when the oil sector collapsed. In order to avoid legal costs, the parties settled the arbitration.
Dispute 3
- Date: 1/8/2018
- Status: Settled
- Allegations: Misrepresentation, unsuitable and excessive trading, negligent supervision, and breach of fiduciary duty
- Damage Amount Requested: $250,000.00
- Settlement Amount: $55,000.00
- Broker Comment: For litigation purposes, both parties agreed to settle, I contributed $25K towards the attorney.
Dispute 4
- Date: 10/24/2011
- Status: Closed-No Action
- Allegations: Excessive number of transactions in customer’s account between February 2009 and October 2011
- Damage Amount Requested: $9,078.55
- Broker Comment: Customer wanted to close account due to loss in market value over 2 1/2 years. (25) trades done overall, (3) in 2011. Total commissions were $97.00.
Dispute 5
- Date: 10/10/2007
- Status: Settled
- Allegations: Unauthorized trading, churning, breach of fiduciary duty, fraud, misrepresentation, and negligence in customer’s accounts
- Damage Amount Requested: $150,000.00
- Settlement Amount: $75,000.00
- Broker Comment: As part of the settlement, Mr. Davis was voluntarily dismissed.
Dispute 6
- Date: 9/22/2006
- Status: Employment Separation After Allegations
- Firm Name: First Montauk Securities Corp.
- Termination Type: Discharged
- Allegations: Unauthorized trading and failure to follow firm policies and procedures
- Broker Comment: Rep voluntarily resigned from First Montauk Securities on 9/22/2006 and was unaware of any allegations until U5 was received. Rep vehemently denies the charges and is conducting further investigation.
Dispute 7
- Date: 5/3/2006
- Status: Settled
- Allegations: Excessive and unauthorized trading in the customer’s account
- Damage Amount Requested: $25,000.00
- Settlement Amount: $7,500.00
- Broker Comment: The firm and the broker deny the allegations. The client was suitable for the transactions recommended and authorized all trades in the account. The client is seeking to blame others for his own investment decisions and for market forces beyond
Dispute 8
- Date: 10/28/2003
- Status: Settled
- Allegations: Unauthorized trading
- Damage Amount Requested: $15,000.00
- Settlement Amount: $1,860.00
- Broker Comment: No unauthorized trading occurred in the customer’s account. The customer signed a margin agreement authorizing the firm to effect margin
Seeking Legal Assistance
If you or someone you know has experienced investment losses as a customer of Dana Davis, several law firms can help you discuss your specific situation and explore the legal options available:
Haselkorn & Thibaut, InvestmentFraudLawyers.com, is another leading investment fraud law firm specializing in fighting for investors nationwide, with a 98% success rate. Call for a free consultation at 1-800-856-3352 or email case@htattorneys.com. No recovery, no fee.
